Federal Register: June 19, 2000 (Volume 65, Number 118)

DOCID: FR Doc 00-15168

Treasury Department

CFR Citation: 15 CFR Parts 730, 732, 736, 738, 740, 742, 744, 746, 758, and 774

Docket ID: [Docket No. 000605165-0165-01]

RIN ID: RIN 0694-AC10

NOTICE: Part III

DOCUMENT ACTION: Interim rule with request for comments.

SUBJECT CATEGORY:

Easing of Export Restrictions on North Korea

DATES: This rule is effective June 19, 2000. Comments must be received no later than July 19, 2000.

DOCUMENT SUMMARY:

The Bureau of Export Administration (BXA) is amending the Export Administration Regulations (EAR) to implement the President's statement of September 17, 1999 easing sanctions against North Korea. The United States is taking this action in order to pursue improved overall relations.

SUMMARY:

38029-38078; 38079-38128; 38129-38146; Department of Commerce, Export Administration; Department of Transportation; Department of Treasury, Office of Foreign Assets Control,

SUPPLEMENTAL INFORMATION

Background

On September 17, 1999, the President announced his decision to ease sanctions against North Korea. The United States is taking this action, which is consistent with the 1994 Agreed Framework and the 1999 Perry Report, in order to pursue improved overall relations.

Under this new policy, most items subject to the EAR designated as EAR99 may be exported or reexported to North Korea without a license. In addition, BXA is changing the licensing policy for certain items on the Commerce Control List (CCL) destined to North Korean civil end users from a policy of denial to casebycase review.

This regulation adds certain categories of items to the CCL for which a license will be required to North Korea. Consequently, this regulation identifies certain Export Control Classification Numbers (ECCNs) that are controlled for antiterrorism (AT) reasons to North Korea only. These new ECCNs do not refer to any column on the Country Chart and therefore exporters are not required to consult the Country Chart in Supplement No. 1 to part 738 to determine licensing requirements for these entries.

This easing of sanctions does not affect U.S. antiterrorism or nonproliferation export controls on North Korea, including enduser and enduse controls maintained under the Enhanced Proliferation Control Initiative. This does not relieve exporters or reexporters of their obligations under General Prohibition 5 in Sec. 736.2(b)(5) of the EAR which provides that, ``you may not, without a license, knowingly export or reexport any item subject to the EAR to an enduser or enduse that is prohibited by part 744 of the EAR.'' BXA strongly urges the use of Supplement No. 3 to part 732 of the EAR, ``BXA's ``Know Your Customer'' Guidance and Red Flags'' when exporting or reexporting to North Korea.

This rule does not affect the export license denial policy imposed under the Arms Export Control Act, as amended, and the Export Administration Act of 1979, as amended, in place against Changgwang Sinyong Corporation and its subunits, successors, and affiliated companies, and certain sectors of North Korean governmentrelated activity, set forth in 63 FR 24585 (May 4, 1998) and more recently in 65 FR 20239 (April 14, 2000). This license denial policy requires BXA to deny license applications submitted for exports to Changgwang Sinyong Corporation and the related entities listed above. This entity is not on the Entity List (see Supp. No. 4 to part 744) and does not appear on the list of projects in Supp. No. 1 to part 740 which have the effect of triggering a license requirement for items subject to the EAR (e.g., including all items classified as EAR99).

Although the Export Administration Act (EAA) expired on August 20, 1994, the President invoked the International Emergency Economic Powers Act and continued in effect the EAR, and, to the extent permitted by law, the provisions of the EAA in Executive Order 12924 of August 19, 1994, as extended by the President's notices of August 15, 1995 (60 FR 42767), August 14, 1996 (61 FR 42527), August 13, 1997 (62 FR 43629), August 13, 1998 (63 FR 44121), and August 10, 1999 (64 F.R. 44101). Rulemaking Requirements

1. This interim rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act (PRA), unless that collection of information displays a currently valid OMB Control Number. This rule involves collections of information subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) These collections have been approved by the Office of Management and Budget under control number 06940088.

3. This rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military and foreign affairs function of the United States. See 5 U.S.C. 553(a)(1). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this interim rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 5 U.S.C. or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

However, because of the importance of the issues raised by these regulations, this rule is issued in interim form and comments will be considered in the development of final regulations. Accordingly, the Department encourages interested persons who wish to comment to do so at the earliest possible time to permit the fullest consideration of their views.

The period for submission of comments will close July 19, 2000. The Department will consider all comments received before the close of the comment period in developing final regulations. Comments received after the end of the comment period will be considered if possible, but their consideration cannot be assured. The Department will not accept public comments accompanied by a request that a part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. The Department will return such comments and materials to the person submitting the comments and will not consider them in the development of final regulations. All public comments on these regulations will be a matter of public record and
[[Page 38149]]
will be available for public inspection and copying. In the interest of accuracy and completeness, the Department requires comments in written form.

Oral comments must be followed by written memoranda, which will also be a matter of public record and will be available for public review and copying. Communications from agencies of the United States Government or foreign governments will not be made available for public inspection.

The public record concerning these regulations will be maintained in the Bureau of Export Administration Freedom of Information Records Inspection Facility, Room 6881, Department of Commerce, 14th Street and Pennsylvania Avenue, NW., Washington, DC 20230. Records in this facility, including written public comments and memoranda summarizing the substance of oral communications, may be inspected and copied in accordance with regulations published in part 4 of title 15 of the Code of Federal Regulations. Information about the inspection and copying of records at the facility may be obtained from the Bureau of Export Administration Freedom of Information Officer, at the above address or by calling (202) 4820500.
List of Subjects

15 CFR Part 730

Administrative practice and procedure, Advisory committees, Exports, Foreign trade, Reporting and recordkeeping requirements, Strategic and critical materials.

15 CFR Parts 732, 740 and 758

Administrative practice and procedure, Exports, Foreign trade, Reporting and Recordkeeping requirements.
15 CFR Parts 736, 742 and 774

Exports, Foreign trade.

15 CFR Part 738

Administrative practice and procedure, Exports, Foreign trade. 15 CFR Part 744

Exports, Foreign trade, Reporting and recordkeeping requirements. 15 CFR Part 746

Embargoes, Exports, Foreign trade, Reporting and recordkeeping requirements.

Accordingly, parts 730, 732, 736, 738, 740, 742, 744, 746, 758, and 774 of the Export Administration Regulations (15 CFR parts 730 through 799) are amended as follows:

1. The authority citation for part 730 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C. 287c; 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; 50 U.S.C. app. 5; E.O. 11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 114; E.O. 12002, 42 FR 35623, 3 CFR, 1977 Comp., p.133; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12214, 45 FR 29783, 3 CFR, 1980 Comp., p. 256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 179; E.O. 12867, 58 FR 51747, 3 CFR, 1993 Comp., p. 649; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12981, 60 FR 62981, 3 CFR, 1995 Comp., p. 419; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp. p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; Notice of November 12, 1998, 63 FR 63589, 3 CFR, 1998 Comp., p. 305; Notice of August 10, 1999, 64 FR 44101, 3 CFR, 1999 Comp., p. 302.

2. The authority citation for part 732 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; Notice of August 10, 1999, 64 FR 44101, 3 CFR, 1999 Comp., p. 302.

3. The authority citation for part 736 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437 CFR, 1994 Comp., p. 917; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; Notice of August 10, 1999, 64 FR 44101, 3 CFR, 1999 Comp., p. 302.

4. The authority citation for part 738 is revised to read as follows:

5. The authority citation for part 740 is revised to read as follows:

6. The authority citation for part 742 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 18 U.S.C. 2510 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; Notice of November 12, 1998, 63 FR 63589, 3 CFR, 1998 Comp., p. 305; Notice of August 10, 1999, 64 FR 44101, 3 CFR, 1999 Comp., p. 302.

7. The authority citation for part 744 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; Notice of November 12, 1998, 63 FR 63589, 3 CFR, 1998 Comp., p. 305; Notice of August 10, 1999, 64 FR 44101, 3 CFR, 1999 Comp., p. 302.

8. The authority citation for part 746 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 287c; 22 U.S.C. 6004; E.O. 12854, 58 FR 36587, 3 CFR 1993 Comp., p. 614; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p.917; E.O. 13088, 63 FR 32109, 3 CFR, 1998 Comp., p. 191; E.O. 13121 of April 30, 1999, 64 FR 24021 (May 5, 1999); Notice of August 10, 1999, 64 FR 44101, 3 CFR, 1999 Comp., p. 302.

9. The authority citation for part 758 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August 10, 1999, 64 FR 44101, 3 CFR, 1999 Comp., p. 302.

10. The authority citation for 15 CFR part 774 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C. 287c, 22 U.S.C. 3201 et seq., 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; 50 U.S.C. app. 5; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; Notice of August 10, 1999, 64 FR 44101, 3 CFR, 1999 Comp., p. 302. PART 730[AMENDED]

11. Supplement No. 3 to Part 730 is amended by removing the next to last entry entitled ``Prohibition of Movement of American Carriers and Prohibition on Transportation of Goods Destined for North Korea''. [[Page 38150]]
PART 732[AMENDED]

12. Section 732.1 is amended:

a. By revising the phrase ``Libya, and North Korea.'' in the next to last sentence of paragraph (d)(2) to read ``and Libya.''; and

b. By revising the phrase ``Libya, and North Korea'' in the last sentence of paragraph (d)(3) to read ``and Libya''.

Sec. 732.2 [Amended]

13. Section 732.2 is amended by revising the phrase ``North Korea, Libya,'' in paragraph (f)(1)(i) to read ``Libya,''.
Sec. 732.3 [Amended]

14. Section 732.3 is amended:

a. By revising the phrase ``Libya, and North Korea;'' in the first sentence of paragraph (d)(4) to read ``and Libya;'';

b. By revising the phrase ``Libya, North Korea,'' in the first sentence of paragraph (f)(1)(i) to read ``Libya,''; and

c. By revising the phrase ``Libya, North Korea,'' in the first sentence of the introductory text of paragraph (i) to read ``Libya,''. PART 736[AMENDED]

15. Section 736.2 is amended by revising the phrase ``Cuba, North Korea, Libya,'' in paragraph (b)(3)(i) to read ``Cuba, Libya,''. PART 738[AMENDED]

16. Section 738.3 is amended by revising the phrase ``ECCNs 0A988, 0A989, 0B986, 1C355, 1C995, 2A994, 2D994, and 2E994'' in paragraph (a)(2)(ii) to read ``ECCNs 0A988, 0A989, 0A999, 0B986, 0B999, 0D999, 1A999, 1B999, 1C355, 1C995, 1C998, 1C999, 1D999, 2A994, 2A999, 2B999, 2D994, 2E994, 3A999, and 6A999''.

17. Supplement No. 1 to Part 738 is amended by revising the entry for ``Korea, North'' to read as follows:
Supplement No. 1 to Part 738COMMERCE COUNTRY CHART
* * * * *
Commerce Country Chart [Reason for control] Chemical & biological Nuclear National Missile Regional Firearms Crime control Antiterrorism weapons nonproliferation security tech stability convention Countries
CB 1 CB 2 CB 3 NP 1 NP 2 NS 1 NS 2 MT 1 RS 1 RS 2 FC 1 CC 1 CC 2 CC 3 AT 1 AT 2 Korea, North............................................. X X X X X X X X X X .......... X X X X X * * * * *
PART 740[AMENDED]

Sec. 740.5 [Amended]

18. Section 740.5 is amended by revising the phrase ``Country Group

FOR FURTHER INFORMATION CONTACT

James A. Lewis, Director, Office of Strategic Trade, at (202) 4820092.

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